Hit & Run

Venezuelans Don't Believe in Bitcoin. They Need Bitcoin.

Pragmatism trumping ideology is a positive sign for cryptocurrency.

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A main gathering place for Venezuela's growing bitcoin community is a secret Facebook group started in 2013 by a young libertarian activist named Randy Brito. As I recounted in a feature story in the current issue of Reason magazine, "The Secret, Dangerous World of Venezuelan Bitcoin Mining," the "Bitcoin Venezuela" Facebook group "serves as an online bazaar featuring ads for cars, bikes, boats, liquor, protein supplements, soap, smartphones, hiking boots, athletic gear, video games, and toilet paper."

I'm yet to see a single post about politics, economics, or the horrors of living under socialism. Though Brito conceived of the Facebook group in part as an educational forum for libertarian ideas, it evolved into something more pragmatic: a marketplace for trading essential goods for bitcoins. According to Brito, most Venezuelan bitcoin users aren't even libertarians.

This came up in a half-hour podcast interview I just did with Tom Woods. Why, he asked, aren't Venezuelan bitcoin users connecting the dots?

Pragmatism trumping ideology is a positive sign for bitcoin. In the U.S., bitcoin is used mainly by computer geeks and libertarians. With a few exceptions, it's not particularly useful (yet) because inflation isn't really a problem, and for the most part the government doesn't obstruct the flow of money in and out of the country. In Venezuela, on the other hand, bitcoin serves as a refuge from hyperinflation—and as a way to circumvent the disastrous monetary controls that make it difficult to import goods from abroad. As I detail in the article, bitcoin is helping Venezuelans keep their pantry shelves full and medicine cabinets stocked.

Libertarians deserve credit for keeping bitcoin alive in its early years, but its future depends on people who haven't spent much time thinking about what government has done to our money. Venezuelans aren't using bitcoin because they believe in it. They're using it because they need it.

Listen to the episode of The Tom Woods Show about bitcoin in Venezuela: